Around five years ago finance journalists never tired of telling us that Tesco accounted for £1 in every £7 spent in UK retail as the shopping juggernaut continued to grow and expand at an awe-inspiring rate.

Now Tesco remains the biggest beast on Britain’s retail scene, but just recently rivals have started to challenge the dominance it’s enjoyed for so long.

And the shift in the store’s fortunes has never been more evident than in the US after an attempt to take its UK success across the Atlantic this week ended in a disappointing £1bn failure.

The supermarket giant announced a review of its US business Fresh & Easy that could see the 199-strong chain sold off or closed.

It also said US boss and 30-year company veteran Tim Mason was leaving with immediate effect.

Cardiff University marketing expert Elliot Pill said Tesco faced stiff competition from rivals like Asda-owner Walmart and “failed to connect” with US audiences.

Mr Pill said: “Walmart are larger than Tesco and maybe they didn’t have the purchasing power to match them on price and service.

“In the UK Tesco is obviously a major player, but in the States it was a bit of a David and Goliath battle.

“They went into that market expecting good growth and have just got a bit battered by the bigger players and I think they’ve decided to cut their losses and get out of that market.”

Tesco chief executive Philip Clarke has said the review would be likely to result in its presence in the US coming to an end.

Walmart – who Tesco were so keen to challenge in their own backyard – have been rumoured as among the potential buyers for the Fresh & Easy stores.

Despite the £1bn investment in the Fresh & Easy chain it never made a profit, losing £74m in the first half of this year, while seeing sales slip below 2% in another disappointing performance in the third quarter.

Mr Clarke has not said how much it is likely to cost to pull out of the US, but suggests his priority was to deliver long-term value for shareholders.

“Whilst the business has many positives, its journey to scale and acceptable returns will take too long,” he added.

Verdict Research retail analyst Andrew Stevens said Tesco did no end of research before it began opening its stores in 2006, but was unfortunate in making its move just a year or so before the recession.

Reports suggest Tesco executives lived with US families to understand how they shopped and ate and built secret test stores.

Mr Stevens said: “They did a lot of market research beforehand to really try to nail down the perfect format for the US.

“But it has come up against two things – quite tough competition. There’s obviously very established convenience players in the United States – namely Whole Foods and Trader Joe’s.

“The second problem is that they entered the US just a year before probably one of the worst economic crises anyone has really seen.”

Closer to home Tesco has had its problems in the UK too – it recently reported its first drop in profits in 20 years and third quarter trading figures showed UK sales slipping back into the red.

The group reported a 0.6% fall in like-for-like sales excluding VAT and fuel in the 13 weeks to November 24.

Figures in September showed rivals Aldi and Sainsbury’s gaining market share at Tesco’s expense. The £1 in every £7 spent in British stores has dropped to around £1 in each £10 for Tesco.

Corporate reputation expert Mr Pill said after so many years of unfettered growth and unchallenged dominance the supermarket had to experience a change in its fortunes sooner or later.

“Like all big brands they’ve gone through an extended period of innovation and of being number one.

“To keep that number one slot is very difficult – you’ve got to constantly innovate – particularly in such a competitive market like we have in the UK.

“It could be they’ve kept on doing the same thing they were always doing hoping for the same success and in the meantime their competitors, who have analysed what they do, upped their game.”

But there are signs Tesco may soon overcome its difficulties.

Its retreat from the US was greeted favourably by the city – the share price rose 3% in a sign investors felt it was right to cut its losses.

Also while overall it’s third quarter figures were held back by a poor performing non-food sector it grew grocery sales by 1.2% on a like-for-like basis and said it outperformed the market.

Market share data from Kantar Worldpanel showed Tesco had seen the best sales growth of the “big four” players for the four weeks to November 25 and grew its market share.